SC asks Bombay HC to decide on cases challenging RERA (Lead)

New Delhi, Sep 4 (IANS) The Supreme Court on Monday asked the Bombay High Court to decide on challenge to provisions of the new real estate law which mandates builders to register their ongoing projects with the Real Estate Regulatory Authority (RERA).

The bench of Justice Arun Mishra and Justice Mohan M. Shantanagoudar asked the other high courts where similar challenges to the provisions of the Real Estate (Regulation and Development) Act, 2016, were pending with them to await the outcome of the hearing by the Bombay High Court.

It gave the Bombay High Court two months’ time to decide on the petition by real estate builder D.B. Realty and any similar matter pending before it.

The court order came on a petition by the central government seeking the transfer of 20 cases challenging the provisions of the 2016 law pending before various high courts to itself.

At the outset of the hearing, as Attorney General K.K. Venugopal addressed the court, Justice Mishra asked why shouldn’t they ask one of the high courts to hear all the petitions and decide on the matter instead of making every one to travel to Delhi.

The bench considered the option of asking Bombay, Karnataka and Delhi High Courts but eventually it was agreed to give it to the Bombay High Court which was moved first challenging the act.

As the court asked what was the objective of the provision of the law regulating the real estate that have been challenged by the builders and developers, the Attorney General said that builders were mis-utilising the money taken from the home buyers and then leaving the projects half way.

On being asked what was the challenge before the High Courts, Venugopal said is their resistance to the provision mandating the registration of ongoing projects with the RERA.

The Central government had told the apex court that the law regulating the real estate was aimed to curb delays in project completion, diversion of funds collected from buyers, one-sided contracts due to power asymmetry, reneging on contractual commitments by both the developers and buyers, and the constraints in financing and investment options available to the sector thus affecting its long term growth.

It said that prior to this law, the operations of real estate sector were opaque with buyers of residential units or commercial spaces were unable to procure complete information or enforce accountability against the builders and developers.

The high courts have been moved by various promoters – builders or developers, promoters association and co-operative societies developing real estate projects for the sale of residential flats, row-houses, and the owners of bungalows and plots, challenged various provisions of the Act.

The provision that at the time of the registration of the project with RERA, the developer will have to submit the authenticated copies of the approvals and commencement certificate from the competent authority has been contested also as well as the requirement to submit the sanctioned plan, layout plan and specifications of the proposed project.

The petitioners before the high courts have also challenged the provision that says that in a multi-phase project, each phase would be treated as a stand-alone project.

They have also challenged the competence of the parliament to enact the law, they have contended that the subject matter falls under the list of State subjects.